State of Limpopo Municipalities& Detail report on Mogalakwena: MEC for COGHSTA briefing

11 August 2015

Chairperson: Mr M Mdakane (ANC)

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Meeting Summary

The provincial Department of Cooperative Governance, Human Settlements and Traditional Affairs
(COGHSTA) briefed the Committee on municipal transformation and institutional development. The presentation covered basic services provision and infrastructure development, the financial viability and management of municipalities, local economic development and good governance and public participation. The presentation then covered the implementation of the back to basics programme before moving on to a

report on Mogalakwena municipality.

Members asked for the names and number of municipalities currently under administration in Limpopo. Why was there no intervention in Greater Tubatse that had not submitted its budgets in time for assessment given that section139 (4) demanded that provinces intervene when budgets were not submitted on time? Members were very concerned over the under spending on MIG by municipalities in the province which directly contributed to a lack of service delivery. Who ordered the police presence at the Mogalakwena municipality and on what legal basis? There were a number of court orders that interdicted the MEC, the former Mayor, 13 councillors and the police from interfering with the municipality conducting its business. It appeared these orders were ignored. Was any effort made to recover the fraud monies via section 32? Why were the six cases that the municipality withdrew from not heard? Why was the application set down on an unopposed court roll for 7 July, not heard? Members were concerned that political infighting in one party had cost the municipality over R20m. Members noted that the interdict on the police did not prevent the police from doing their job.

Members asked for further explanation on the sanitation and refuse removal figures. Members questioned the loss of revenue and asked for clarification on the poor collection of revenue. What were the other factors causing the Integrated Development Planning (IDP) not to be the requisite standard? What were the specific problems, like roads for e.g., affecting maintenance and repairs? Members wanted to see that more detailed budget requests are put forward. What was the long-term sustainability of Mogalakwena? What should be avoided and what should they be working towards? What engagements had been pursued with regard to leveraging development through engagement with the private sector?

Members said lessons to be learnt from the Mogalakwena debacle was that matters had to be attended to as soon as possible and procedures had to be followed. Members asked for clarification of the matter of the municipal manager and an unopposed matter on the roll. Had there been engagement with the mining companies on the lack of services in the relocation area where two mining communities had been relocated? Of more concern to members was the spectre of tribalism that was being brought to the fore in this matter. What plans were there to address the Mokopane water services challenges? Was there a bucket system in Mogalakwena?

Members said the issue of tribalism that had been mentioned in discussion was not a tribalism issue, and if it were emphasised it would cause more harm to the country. People were complaining about the distribution of resources. The Malamulele situation was not a tribal problem; it was an issue of service provision in one municipality as compared to another municipality, such as water provision in certain municipalities.

Meeting report

Mr A Mariba, Senior General Manager in the provincial Department of Cooperative Governance, Human Settlements and Traditional Affairs (COGHSTA), gave an overview of the province. On municipal transformation and institutional progress, finding candidates to fill the municipal manager and CFO positions was beginning to be a huge problem for municipalities because there was a reluctance to fill positions in municipalities affected by the re-determination of boundaries.

Speaking to basic services provision and infrastructure development, 367 projects were implemented of which 86 were completed.

Mr Mariba spoke to provincial spending patterns since MIGs inception. As at end June 2015, 73% of MIG funds were spent. In certain municipalities spending was very low. Sekhukhune municipality in the Vhembe district spent 58%. Thabazimbi municipality and Waterberg municipality in the Waterberg district spent 16% and 0% respectively.

The 2013/14 audit outcomes reflect that Vhembe District, Ba-Phalaborwa, Ephraim Mogale, Fetakgomo, Thabazimbi and Greater Tubatse municipalities received audit disclaimers. In January 2015 R540m was taken away from poor spending municipalities and R224m was re-allocated to municipalities in the province. As at end of June 2015,73% of R2.7b was spent.

Mogalakwena and Greater Tubatse municipalities did not submit their budgets timeously for assessment and

National Treasury assessed Polokwane municipality.

The assessment criteria used were the credibility, relevance and sustainability of the budgets.

On credibility it was found that there was not enough reasonable assurance that revenue projections were realistic and there was poor alignment of DORA conditional grants in the budget schedules.

On relevance, municipal budgets were generally linked to national priorities. Budget documents and schedules were not, however complete. Departments did not send officials with sufficient knowledge of their departmental plans and strategies to IDP participation sessions. Risk management activities were not integrated into the municipal budget process.

On sustainability, there was poor revenue collection, which rendered municipalities unable to meet short term financial obligations and an inability to retain sufficient cash reserve to maintain municipal infrastructure and replace assets. There was an inability to quantify distribution losses. There was limited usage of number of households and future expected number of households in the budgeting process.

Mr Mariba then spoke to the risks that might affect budget implementation and to Local Economic Development (LED) and Good Governance and Public Participation and the Implementation of the Back to Basics (B2B). As part of the B2B launched in December 2014, diagnostic assessments were conducted. The December 2014 Assessments reflected 10 Dysfunctional municipalities, namely Vhembe, Aganang, Mopani, Thabazimbi, Polokwane, Mookgophong, Mogalakwena, Ephraim Mogale, Sekhukhune and Greater Tubatse.

Mr Mariba spoke to the strategies to meet the challenges in these municipalities. Of concern was the inability to attract and maintain suitable skills in rural municipalities, inability to attract candidates for Municipal Managers’ position towards the end of the electoral cycle of the municipality, and financial management, with particular reference to the revenue generation capacity of municipalities especially of rural municipalities.

On the Mogalakwena municipality, there were five vacancies, including that of Municipal Manager, which had been advertised and a short listing would be conducted by end August, and Chief Financial Officer who had resigned on the 9 July 2015.

On the state of service delivery, Mogalakwena Local Municipality was both the Water Services Authority (WSA) and Water Services Provider (WSP). The municipality was 84 % dependant on boreholes. Most of the boreholes run dry during the winter season, which poses a challenge with regard to meeting the demands. In terms of planned water supply interventions to address these issues, the municipality was in the process of installing infrastructure in extensions 14,17, 19 and 20. Water tank trucks would be used to truck in water supplies. The municipality had secured an additional 5ml/d from Doorndraai Dam. More permanent solutions were the completion of Olifants River Water Resource Development Project that would be completed in 2019.

Additional water related challenges were the stealing of transformers, breakages of pump machines and related maintenance equipment which would result in delays, and poor working relations between pump operators and the community leadership, illegal connections on the system in rural and urban areas, ageing infrastructure, the reliance on borehole sources for supply, and insufficient supply capacity .

The current sanitation backlog was 42%. Mokopane Town Sewer Plant was running at full capacity.

The municipality was currently in the process of refurbishing the facility, a standby generator was already installed and old pumps were replaced. A contractor was appointed to build an additional sewer plant at Masodi.

The municipality had three informal settlements, and there was currently no infrastructure for basic services.

The settlements of Armoed and Rooibok were relocated by the Anglo Plats mine and were now experiencing inadequate water supply as well as poor sewer services. The mining company did not address these challenges at the time of relocations but the municipality was engaging the mining company and the affected communities to work out a long lasting solution.

Political instability within the municipality had resulted in 23 ANC councillors being expelled, of which 13 were Ward councillors. The councillors refused to vacate office after their expulsion. The councillors, together with ten other councillors from the opposition parties continued to take council resolutions and implemented them. By-elections were held in November 2014 to replace the expelled councillor. The expelled councillors and the suspended Municipal Manager resorted to the courts for relief, resulting in about 8 cases before the courts. There was political intervention to address the instability within the municipality. The restructuring culminated in the appointment of a new Mayor, Speaker and Chief Whip.

Ms Grace Makhurupetje, MEC for COGHSTA, spoke to the issue of how Limpopo was affected by the reconfiguration of municipalities. The 25 municipalities would be reduced to 20. It was proposed that in Waterberg, Mookgopong and Modimolle amalgamate and in Sekhukhune, Setagu amalgamate with Tubatse, while Aganang in Capricorn be split and join with Blouberg and Polokwane. In Mopani, Maruleng must wait until after elections rather than disband. In Vhembe there was a challenge where Mutale would be split amongst Musina and Thulamela the Demarcation Board was saying Thulamela already had 40 wards and would grow bigger hence the Board was recommending that a new municipality made up of part of Malamulele, Vuwani and Machado be established. This was being discussed. The challenge was that people of Malamulele thought of it as their municipality as there were 14 wards from their municipalities in the reconfigured municipality. The matter was starting to shape along tribal lines of the Venda and Shangaan. The final outcomes of the Demarcation Board were not known.

Discussion

Mr K Mileham (DA) asked how many municipalities were currently under administration in Limpopo and to provide their names?

Ms Makhurupetje said the municipalities under administration were Mogalakwena and Ba Phalaborwa. The latter was under administration because it could not get its valuation roll adopted on time so in the previous financial year could not levy rates and therefore was put under section 139 the previous year. It was under consideration for removal from being under administration by the executive committee because the municipality was able to provide a credible valuation roll and was stable. Mogalakwena was put under a review process by a court, which still had to make a decision.

Mr Mileham said Mogalakwena and Greater Tubatse did not submit budgets in time for assessment, section 139(4) demanded that provinces intervene where budgets were not submitted on time. Why was there no intervention in Greater Tubatse? Municipalities were not spending their budgets and the audit reports they received. He believed there was a direct correlation between this and the vacancies at senior management level. He recognised that there was difficulty in finding people but the fact that contracts were limited was misleading as the contracts could be renewed and all section 57 officials were on limited term contracts. He was very concerned over the under spending on MIG by municipalities in the province which had the lowest percentage spend on MIG of all the provinces. This directly contributed to a lack of service delivery. Sekhukhune, Mopani, Lepelle Nkumpi, Thabazimbi and Waterberg district municipalities stood out.

There were a number of issues regarding Mogalakwena. During the ‘unrest’ at the end of the previous year there were police interventions, court cases and court orders. Who ordered the police presence at the Mogalakwena municipality and on what legal basis? There were a number of court orders that interdicted the MEC, the former Mayor, 13 councillors and the police from interfering with the municipality conducting its business. It appeared these orders were ignored. There was a council meeting for the newly elected ward councillors who had not yet been sworn in and this was not valid. Regarding the fraud issue, R5.7m fraud occurred in the last two weeks of the financial year. Was any effort made to recover this money via section 32? Regarding the six court cases which the municipality withdrew, the municipality was only one of the applicants, and the former municipal manager was also an applicant so why were the cases not heard? Regarding the application set down on an unopposed court roll for 7 July, he asked why this matter was not heard? He was concerned that political infighting in one party had cost the municipality over R20m.

Ms Makhurupetje said if there had been political infighting then all the political parties had to take responsibility. In Mogalakwena the infighting in the ANC was influenced by the DA being witnesses in court and by statements made by the DA.

The Structures Act had been adhered to and the law was fully followed. When by- elections were held and the results announced those members were automatically declared as councillors elect. People challenging the result took the processes around the by- election to court, and that case was lost.

The issue of who sent the police was also a matter put before court and it was not the MEC who had sent for the police. This matter was also finalised and it was declared to be wrong to interdict the police and the police won that case.

The cases withdrawn were those lodged by the municipal manager. It had been felt by the municipality that the municipal manager was usurping powers that did not belong to him and he was expelled via a disciplinary process after which he then he went to court to fight his expulsion and he lost this case. Out of all the cases there were only two remaining.

On the issue relating to section 139 and why Mogalakwena and Greater Tubatse were not put under administration, it was because the back to basics report was clear on what interventions had to be made and it was felt they were getting back on the right track.

Regarding low expenditure figures, one had to remember that Limpopo as a province had been under administration. Those municipalities that had challenges like Mopani were being assisted on the specific issues causing them to under spend. One issue was not registering projects on time. To date 90% of projects for the next financial year were finalised. The situation would change for the better and the province was working with the intergovernmental forum and with the Department of Water and Sanitation. The province had held a provincial water summit, as most of the projects were water related projects.

Mr Parks Sebatjane, Mayor of Mogalakwena municipality, said there was an interdict to prevent police entering the municipality’s precinct and they wanted the interdict to be made an order and the court had refused.

Regarding the fraud matter, the investigation was still on-going but they measures were in place to prevent a recurrence.

Mr Mileham said the interdict on the police did not prevent the police from doing their job. They needed permission if they wanted to interfere with council activities. Staff was prevented from getting to work and had water cannons turned on them. Subsequently, the interdict was not extended and the police acted in contempt of that order on the instructions of various officials whose names he had.

Regarding the intervention in Greater Tubatse, he said section139 (4) said that if municipalities did not approve the budget the MEC could take appropriate steps to ensure the budget was approved. Did the MEC intervene and what steps did she take?

Mr A Masondo (ANC) requested further explanation on the sanitation and refuse removal figures. He questioned the loss of revenue and wanted clarification on the poor collection of revenue was it business, residents or another group of clients that were not paying? What were the other factors for the Integrated Development Planning (IDP) not to be the requisite standard, apart from saying officials with lesser capabilities were sent to facilitate the compilation of the IDP? What were the specific problems, like roads for e.g., affecting maintenance and repairs? He wanted to see that more detailed budget requests are put forward. What was the long-term sustainability of Mogalakwena? What should be avoided and what should they be working towards? What engagements had been pursued with regard to leveraging development through engagement with the private sector? He said one of the threats was the issue that mining development s could also lead to slumps as was the case in some mining cities and towns becoming ghost towns once mining companies left.

Mr P Mapulane (ANC) said that lessons to be learnt from the Mogalakwena debacle was that matters had to be attended to as soon as possible and that procedure had to be followed. He asked for clarification of the matter of the municipal manager and an unopposed matter on the roll. Regarding the difficulty in attracting CFOs, especially near the end of a term of office, he said section 56 managers were not supposed to be appointed on a contract basis for more than five years except the municipal manager according to the new amended regulations. The rest were permanent, not contract staff, so this was a problem that needed to be attended to by the Committee. He asked if there had been engagement with the mining companies on the lack of services in the relocation area where two mining communities had been relocated to? This was a matter the provincial government should take the mines to task. Mines did not contribute to service areas where these people had been relocated. What was the provincial government doing to get commitments from the mines? Regarding the demarcation issue, he said there was a problem in Malamulele. In Mogalakwena it encouraged the situation where people wanted to determine their own boundaries. Of more concern was the spectre of tribalism that was being brought to the fore in this matter. This had to be discouraged. Currently the creation of a new municipality was causing a tribal feud. If it were not stopped in Malamulele then it would be replicated throughout the province and country. Tribalism was bad and Rwanda was sitting with the scars of tribalism.

Mr E Mthethwa (ANC) said if one wanted to come up with a new municipality, would those people not have difficulty in terms of service delivery? On the Mokopane water services challenges, what plans were there to address this before it became a crisis. He asked if the legal fees were being recovered in the cases the former mayor, the municipal manager and the 23 who took the municipality to court had brought against the municipality and had lost with costs.

Mr A Mudau (ANC) asked if there was a bucket system in Mogalakwena.

The Chairperson said the issue of tribalism that had been mentioned in discussion was not a tribalism issue. This would cause more harm to the country if it were emphasised. People were complaining about the distribution of resources. The Malamulele situation was not a tribal problem where a certain language or custom was the issue it was an issue of service provision in one municipality as compared to another municipality like for example water provision in certain municipalities.

Ms N Mthembu (ANC) said she hoped in future to get a report on new LED initiatives boosting the economy there.

Mr C Matsepe (DA) expressed concern that a municipal contractor did not have a truck or manpower and was using municipal manpower. Residents of Elias Motsoaledi town were complaining of an amount of R1500 demanded by the municipality for arrears even though they were in these houses for the past 20 years. He wanted the legitimacy of this payment to be investigated. Elias Motsoaledi had had a game farm. The security firm was still there even though the game had been sold. Even if the argument was that the firm was looking after the farm, squatters living close by had cut down all the trees on the farm and the fencing had been taken away. Could this be enquired into? Security had been appointed the previous December at Mogalakwena without due process being followed. He asked this to be followed up and a reply given?

Mr Sebatjane said the security companies were not appointed procedurally. The contracts had been assessed and the numbers of security personnel was reduced from 247 to 128 who were mainly guarding key infrastructure for service delivery because people sabotaged water pumps. The contracts were now on a month to month basis and the municipality would be advertising soon for a new contract.

Where cases were dismissed with costs, the municipality would seek to recover monies.

Mogalakwena did not have a bucket system.

In the areas where mining communities were relocated, cisterns were installed which were then emptied at the main sewer plant.

Regarding new LED initiatives, they were rolling out bulk infrastructure projects for water, electricity and sanitation.

Regarding long-term sustainability, staff were politicised and had to take sides during the issues with council at the municipality, and management were busy trying to depoliticise the staff and focus them on their work. A key initiative to stabilise the matter was the engagement with community structures, traditional leaders and civic structures. In this way communications had improved a lot.

Ms Makhurupetje said the issues of Mogalakwena started in 2013 and the back to basics program had led to them trying to identify and intervene in problem areas timeously and give support to municipalities in areas they found challenging.

Regarding the water statistics it reflected progress since 1996 up to the 2011 census figure, which stood at 86%. With regard to sanitation there were no statistics in 1996 and the figure in 2011stood at38%. The municipality was looking at who was using the most water, whether it was the domestic, mining or agriculture sector.

Regarding repairs and maintenance, there had to be an operations and maintenance budget for any project being planned currently to ensure that the infrastructure was taken care of. The Department was raising the issue of sector departments where senior officials had to be sent to meetings pertaining to the IDP.

Regarding the mining issues, the department already met with Anglo who was prepared to do what they were supposed to do in accordance with their responsibility in the area of Mogalakwena.

Matters regarding Elias Motsoaledi and would follow it up.

Regarding the Chairperson’s comments on Malamulele and Vuwani, it was true that the issue was not tribalism but of service delivery.

The Chairperson said he was happy the Mogalakwena matter was closed and that the province was meeting with the Department of Water and Sanitation on challenges, because it was a big issue in rural areas. The State should not be projected as a delivery state but as a state facilitating the delivery of services.